Correlation Between RCS MediaGroup and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both RCS MediaGroup and CNVISION MEDIA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining RCS MediaGroup and CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCS MediaGroup SpA and CNVISION MEDIA, you can compare the effects of market volatilities on RCS MediaGroup and CNVISION MEDIA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in RCS MediaGroup with a short position of CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCS MediaGroup and CNVISION MEDIA.
Diversification Opportunities for RCS MediaGroup and CNVISION MEDIA
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RCS and CNVISION is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding RCS MediaGroup SpA and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and RCS MediaGroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on RCS MediaGroup SpA are associated (or correlated) with CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of RCS MediaGroup i.e., RCS MediaGroup and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between RCS MediaGroup and CNVISION MEDIA
Assuming the 90 days trading horizon RCS MediaGroup is expected to generate 1.09 times less return on investment than CNVISION MEDIA. But when comparing it to its historical volatility, RCS MediaGroup SpA is 1.45 times less risky than CNVISION MEDIA. It trades about 0.07 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.65 in CNVISION MEDIA on November 3, 2024 and sell it today you would earn a total of 1.55 from holding CNVISION MEDIA or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCS MediaGroup SpA vs. CNVISION MEDIA
Performance |
| Timeline |
| RCS MediaGroup SpA |
| CNVISION MEDIA |
RCS MediaGroup and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCS MediaGroup and CNVISION MEDIA
The main advantage of trading using opposite RCS MediaGroup and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCS MediaGroup position performs unexpectedly, CNVISION MEDIA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| RCS MediaGroup vs. GBS Software AG | RCS MediaGroup vs. TELECOM ITALIA | RCS MediaGroup vs. USU Software AG | RCS MediaGroup vs. VITEC SOFTWARE GROUP |
| CNVISION MEDIA vs. PLAYTECH | CNVISION MEDIA vs. US Physical Therapy | CNVISION MEDIA vs. Siemens Healthineers AG | CNVISION MEDIA vs. Aristocrat Leisure Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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